Transglutaminases form an isodipeptide crosslink between an acceptor amide group of a protein bound glutamine residue and a donor e-NH2 of a protein bound lysine residue, thereby forming a highly insoluble macromolecular complex. In the epidermis, three enzymes are thought to be involved in crosslinking of certain defined structural proteins to form an insoluble cornified cell envelope, and are transglutaminases 1, 2 and 3. We are studying in detail the roles of the human transglutaminase 1 and 3 enzymes. By use of new specific antibodies, we have found that the transglutaminase 1 system in keratinocytes or foreskin epidermis is very complex, since it exists in multiple soluble as well as membrane-bound forms. The most active of these, a 67 and 33kDa complex held together by secondary forces, is generated during terminal differentiation in these cells by proteolytic cleavage of specific sites that are conserved in the family of transglutaminases. This is similar to the known proteolytic activation of the transglutaminase 3 system. The proximal promoter region of the transglutaminase 3 gene is located within the first 125 bp above the transcription initiation start site, and consists of an Sp1 motif modulated by two adjacent ets-like motifs. These are sufficient to connote epithelial specific expression to this gene.